Homeowner's Principal Residence Exemption

Public Act 115 of 2012 (2011 Senate Bill 349), which amended Section 211.7cc of Public Act 206 of 1893, the General Property Tax Act. The Act makes two significant changes:

1. It establishes two deadlines by which a Principal Residence Exemption may be filed.

2. It creates a new conditional rescission for "foreclosure entities."

The new filing deadline for a property owner to file a "Principal Residence Exemption (PRE) Affidavit" (Form 2368) for taxes levied after December 31,2011, changed from May 1 to June 1, and a second deadline of November 1 was added. As a result, property owners that occupy a property as a principal residence and submit Form 2368 to the local tax collecting unit on or before June 1, 2012, may qualify for the PRE beginning with the 2012 summer tax levy. If a property owners occupies a property as a principal residence at any time from June 2, 2012 to November 1, 2012 and submits Form 2368 to the local tax collecting unit on or before November 1, that property may qualify for a PRE beginning with the 2012 winter tax levy. This dual deadline will continue throughout future tax years, but is not retroactive to previous tax years.

Public Acts 312 and 331 of 1993 provided for a homestead exemption from a portion of school operating taxes. The reference to the exemption was changed in 2002 from Homestead Exemption Affidavit to Homeowners Principal Residence Exemption Affidavit. This change was made to help eliminate the confusion between this property tax break and the income tax homestead credit. The name also clarifies that the exemption is for homeowners, not renters, and that only one exemption can be claimed and it must be on the principal residence. Many of the following exemption references will continue to say Homestead Exemption Affidavit (aka Homeowners Principal Residence Exemption). Homeowners are required to fill out an affidavit to claim this exemption. Act 331 requires the affidavit to be filed with the local municipality. The original filing deadline for filing the form was March 1, 1994. This deadline was subsequently extended to May 1, 1994. Each year, the exemption deadline is May 1st for new filers. An already existing filing will not require any additional filing as long as the claimants’ exemption status remains unchanged.

Any time the exemption status of a property changes, the party or parties are required to file an affidavit with the assessor for the city or township where the property is located. Michigan Department of Treasury Form 2602 (Rev. 6-99), Request to Rescind/Withdraw Homestead Exemption, is required to be filed if you wish to adjust an exemption. Examples of the need to file this form are: sale of your principal residence to a new owner; conversion of part or all of your principal residence to a rental; and, your property is receiving an exemption in error and did not qualify. Michigan Department of Treasury Form 2368 (Rev. 6-99), Homestead Exemption Affidavit, is required to be filed if you wish to receive an exemption. Once you file on a residence, no additional filings are required as long as the claimant's exemption status remains unchanged. New to this affidavit in 1999 is the statement "An affidavit filed by an owner for a Homestead Exemption rescinds all previous exemptions filed by that owner." Michigan Department of Treasury Form T-1063 (5/94), Claim For FARMLAND Exemption From Some School Operating Taxes, is required to be filed if the property is used primarily for agricultural purposes, but is not classified as agricultural and you answer NO to the following two questions: 1.) Is the property vacant and classified agricultural? (Note - Vacant property classified as agricultural is automatically exempt from some school taxes); 2.) Have you already filed the Homestead Exemption Affidavit for this property?

When completing affidavits for filing with the local assessor, please read them carefully and complete all of the appropriate sections in their entirety. Some common problems found with forms received by the assessor are: wrong property tax identification number is used; forms are not complete; forms being submitted that are not state approved; using date of sale when the date of occupancy is required; and, buyers are being given the sellers rescind form to file with the assessor.

The homestead exemption, adopted in March of 1994, allows for an exemption of up to 100% of the eighteen mill local school operating tax levy for qualified homestead property. The tax reform also allowed for two additional levies: a "Supplemental" and, a "Local Enhancement" levy. The "Supplemental" allows for a levy of up to 18 mills on homestead property only until the school districts combined state and local revenue per pupil for the fiscal year ending in 1995 equals the school districts foundation allowance. The Taylor Public School District currently (2006) operates with no additional supplemental levy or "Local Enhancement" levy.

It is important to re-emphasize that in order to receive the lower homestead rate, a property must qualify as a "Homeowners Principal Residence" and an Affidavit must be on file with the local assessor’s office. A property must be owned and occupied as a principal residence on or before May 1st to qualify for the exemption for that assessment year.

The property tax calculation is a straightforward multiplication with the formula being: Taxable Value x Millage Rate = Property Tax. The millage rate is the total number of mills (1 mill = 1/1000 of $1) being levied by each taxing entity. On a property with a Taxable Value of $75,000 and a homestead millage rate of 46.6445, the tax calculation would be: $75,000 x .0466445 = $3,498 (total taxes for the year).

All of the forms and affidavits pertaining to the homestead exemption can be obtained from the City of Taylor Assessors Office. The Department of Treasury can also supply you forms, order by calling 1-800-FORM-2-ME. Click here to view and print homestead related forms and information.

Filing deadlines require the receipt by the Assessors Office or a postmark on or before the due date.

The latest publications pertaining to the homestead exemption are: the Michigan Department of Treasury, Questions and Answers, Volume 3, June 1994; and, the Michigan Department of Treasury, Guidelines For the Michigan Homestead Property Tax Exemption Program, 2851 (1/00). Both of these documents are available in the Assessors Office. Any questions can be directed to the Department of Assessing at (734) 374-1315.